AI Investment Rising Significantly Among Early Adopters

Sixty percent plan to increase investment by more than 50% compared to last year

Early adopters are ramping up investment in artificial intelligence (AI) technologies in 2018 reveals an AI study conducted by Constellation Research. Sixty percent of C-level executives surveyed say their organizations plan to increase investment in AI by over 50% compared to last year (Figure 1). AI budgets, however, remain relatively modest with 92% of respondents expecting to spend less than $5 million on AI in 2018.

Figure 1. AI Budgets Rising in 2018

Modest AI budgets signal cautious adoption and deployment of foundational AI technologies for now. However, because AI often delivers successes exponentially, Constellation expects AI budgets to continue to rise by more than 50 percent annually for the next four to five years as AI R&D yields bigger successes at an increasing pace.

Firms investing in AI to improve the customer experience and drive growth

AI adoption highest among IT; Customer Service; and sales and marketing departments

The Constellation Research 2018 AI Study reveals firms are investing in AI to help improve the customer experience and drive growth. C-level executives surveyed by Constellation reported the highest levels of investment and adoption in the following departments: information technology; customer service/commerce; sales and marketing; and employee productivity.

Fifty-two percent of respondents report AI projects in production or in pilots in the IT department, 50 percent report production or pilot AI projects in customer service/commerce, 46 percent report AI projects in production or pilots in sales and marketing, and 36 percent report AI projects in production or in pilots in employee productivity (excludes manufacturing employee productivity) (Figure 2).

Figure 2. AI Spending By Department

Driving this trend, explains Cindy Zhou, a Constellation Research principal analyst, is the ease with which firms can acquire AI capabilities for these departments. Packaged apps with AI capabilities are widely available for sales, marketing, employee productivity and commerce. As stated earlier, packaged apps with AI capabilities are often features of existing software or a platform that can simply be "turned on."

"As far as sales, marketing, and customer service organizations are concerned, AI is already here," says Zhou. "Salesforce and Microsoft for example, sell applications with AI capabilities rolled into the core product, or they are sold as add-ons. Salesforce Lightning platform customers automatically get basic Salesforce Einstein capabilities with their contract. If customers need more robust AI capabilities, they can upgrade," she explains, speaking about Salesforce Einstein, the company's AI layer within the platform, which powers a variety of built in and, in some cases, optional skills and application capabilities.

Highlights from the Study

• Widespread adoption with caveats: Seventy percent of respondents to the Constellation 2018 AI Survey indicate their organization currently employs some form of AI technology. This number, however, tells only part of the story. AI budgets remain relatively modest (see below), and, even among early adopters, no organizations in the study have deployed true AI.
• AI investment modest but growing fast: Ninety-two percent of respondents say they will spend less than $5 million on AI in 2018. However, respondents indicate significant year-over-year increases in AI budgets, with 60 percent of respondents registering a 50 percent increase in AI budgets compared to last year.
• Firms employ three primary modes of AI development: developing homegrown applications by building out data science teams and using open source frameworks; developing homegrown applications using cloud-based ML and deep learning (deep learning services; and adopting packaged applications with AI capabilities.
• Companies are investing in AI to help improve the customer experience and drive growth. When Constellation asked respondents to indicate the department(s) where AI is planned or implemented, IT, customer service/commerce, sales and marketing, and employee productivity ranked among the departments receiving the most planned or in-production AI spending. Driving this trend is the ease with which firms can acquire AI capabilities for these departments. Packaged apps with narrow AI capabilities are widely available for sales, marketing, employee productivity and commerce.
• Potential AI-proficient talent shortage. Rising demand for workforce talent with AI proficiency poses a potential challenge for organizations that want to implement AI solutions. Eighty percent of executives say their organizations need to hire additional human capital to implement AI solutions. Seventy-two percent of organizations say they obtain new talent for AI projects via recruiting. Taken together, these two trends have the potential to culminate in a talent war as more AI projects come online.
• Executives are feeling the pressure. Eighty-eight percent of executives say they expect their roles to change as their organizations adopt AI. Fifty-four percent of executives say they will need to understand how to restructure the business to accommodate new business models, 50 percent report a need to acquire data expertise and 48 percent report needing to learn how to motivate an AI-augmented team.
• Resistance to AI: Fifty-two percent of respondents report resistance to AI within the organization. Top sources of resistance among those who reported resistance to AI include lines of business at 67 percent, IT at 32 percent and HR at 25%.
• Data privacy strategies are not yet ubiquitous among firms using or developing AI. Among firms using AI, 23 percent say their organization does not have a data privacy strategy to protect personal information ingested by AI. Thirty-one percent of organizations       currently using AI do not have an opt-in policy to handle personal information ingested by AI.

About the Study

The Constellation Research 2018 Artificial Intelligence Study leverages findings from the 2018 Constellation Research Artificial Intelligence Survey which assesses the state of AI among the first movers, early adopters, and fast followers that comprise Constellation's subscriber base.

The Survey asked C-level executives about the state of AI investment and deployment in their organizations, budgets for AI investment, technologies driving AI development, how AI might impact executives and the workforce, sources of internal resistance to AI, and privacy.

For the purposes of both the Survey and the Study, Constellation defines artificial intelligence as the culmination of technologies including deep learning, neural networks, natural language processing, and big data/predictive analytics to produce software that is self-improving, automatic, and emulates human intelligence.

Seventy-four percent of responses came from the C-suite, with CEOs making up 26 percent of the sample; CIOs, 20 percent; CTOs, 10 percent; CDOs, 6 percent; CMOs, 2 percent; and other C-level executives, 10 percent. There were no CFOs in the survey sample.

The sample consists of respondents from twelve different sectors, mostly in the United States. Sectors include automotive; consumer electronics; consulting/systems integration; finance/insurance/real estate; government; healthcare/medical/pharmaceutical; media/interactive/PR agency; news/entertainment; retail; technology-hardware, software, services; and telecommunications or travel/hospitality.

Total revenue of respondents' firms in 2016 range from less than $10 million to more than $1 billion. Twenty-nine percent of respondents reported revenue of less than $10 million; 14 percent reported revenue between $10 million and $50 million; 29 percent reported revenue between $50 million and $500 million; and 29 percent reported revenue of over $1 billion.

Download a complimentary copy of the Constellation Research 2018 AI Study.

Microsoft Acquires GitHub

Alan Lepofsky

Vice President & Principal Analyst
Constellation Research

Alan Lepofsky - VP and Principal Analyst, Constellation Research. With almost two decades of experience in the collaboration software industry, Lepofsky helps organizations improve the way their employees work together to get their jobs done. Lepofsky’s primary research area The Future of Work, focuses on: integrating collaboration and business processes (Purposeful Collaboration), structuring work via Social Task Management, leveraging analytics and digital assistants to work more productively, the strategic impact of mobile computing on business transformation, and measuring workforce culture based on Digital Proficiency instead of age. Twitter: @alanlepoLinkedIn: https://ca.linkedin.com/in/alanlepo     , Title: Big IdeasIntelligent Collaboration: The Intersection of…...

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On June 4th, 2018 Microsoft announced their intention to acquire GitHub. My research focuses on team collaboration, not application development, so my interest in this deal is around areas of working together, community, etc. Here are a few thoughts:

• If/when/how Microsoft could create a use-case focused version of Microsoft Teams for developers
• What solutions could be created by adding GitHub data into the Microsoft Graph? Could this help developers promote their projects, connect with new contracts, etc? Could it help employers find developers? Could this help create better developer communities?
• How will this enable Microsoft to compete against Atlassian's combination of BitBucket and Stride?

For more information related to the technical aspects of application development tools and platform, follow my colleague Holger Mueller.

Similarly, Ray Wang has some great thoughts about this from a business standpoint, especially around enticing a new generation of developers to think about Microsoft.

Here is a collection of tweets showcasing some of the thoughts from my Constellation Reseach colleagues and me. 

Host Analytics Simplifies Collaboration Between Finance and Business Users

Doug Henschen

Former Vice President and Principal Analyst
Constellation Research

Doug Henschen is former Vice President and Principal Analyst where he focused on data-driven decision making. Henschen’s Data-to-Decisions research examines how organizations employ data analysis to reimagine their business models and gain a deeper understanding of their customers. Henschen's research acknowledges the fact that innovative applications of data analysis requires a multi-disciplinary approach starting with information and orchestration technologies, continuing through business intelligence, data-visualization, and analytics, and moving into NoSQL and big-data analysis, third-party data enrichment, and decision-management technologies. Insight-driven business models are of interest to the entire C-suite, but most particularly chief executive officers, chief digital officers,…...

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Host Analytics introduces MyPlan, MyPlan Mobile to enable budget owners on the business side to collaborate on forecasts, plans and agile course corrections.

Budget-owners on the business side don’t want to use software designed for financial professionals any more than finance types want business people interacting with data or software features they shouldn’t see or touch.

These prevailing instincts are the reason Host Analytics (Host) recently added a business-user-oriented MyPlan interface for its cloud-based enterprise performance management (EPM) system. At its May 21-23 Host Perform user conference, the company followed up by announcing MyPlan Mobile, a device-native app (initially on iOS) designed to keep executives who are on the go connected to budgeting and planning processes.

Held this year in Dallas and attended by some 700 customers, Host Perform also highlighted recent upgrades and coming attractions to the vendor’s software-as-a-service-based EPM platform. But MyPlan and MyPlan Mobile were the clear centers of keynote and expo-floor attention.

Design for Business Users

EPM vendors are all fond of saying that budgeting and planning should be a team sport. And in a perfect world, finance wouldn’t rely on emailed spreadsheets and other disconnected, manual methods to gather data and collaborate with budget owners around forecasts and plans. EPM systems give finance a centralized, collaborative platform for budgeting and planning, but these systems have not typically seen broad adoption outside of finance. In Host’s assessment that’s because EMP systems are designed, first and foremost, for finance professionals and are not familiar or intuitive for business users.

Rather than dumbing down its usual interface, Host developed MyPlan through clean-sheet design sessions with budget-owning business users. What these users want, Host discovered, is a simpler interface in which they can see where they stand, meaning actual performance to date, see where they’ll land, meaning at the end of current budget period, and see what they can plan, meaning how they can adjust their spending and allocations to meet budget expectations.

The result was the MyPlan interface (shown below), which was made generally available in March. The interface gives the budget owner – it this case, a marketing executive – a clear sense of where they stand in terms of people, equipment, travel and program expenses. Green and red colors highlight where forecasts and budget figures are on track and where there’s variance.

Host's MyPlan (top) and MyPlan Mobile interfaces (above) are designed to show business users where they stand on actual performance and where they're forecasted to land by the end of the current financial period. By selecting a wrench icon, users can test changes, reforecast and then update their plans in order to meet budget expectations.

The MyPlan Mobile App, which will be released in the second half of 2018, will enable employees who are on the go to see the latest results and then respond, by adding or deleting a planned employee, adding or deleting an asset, or approving or rejecting an expenditure and submitting the update to finance. In a role-playing scenario during the opening keynote at Host Perform, a corporate lawyer used MyPlan Mobile to reviewed the latest expenditures for the Legal department, make changes to his plan, reforecast and then submit updates to his budget.

MyPOV on MyPlan and MyPlan Mobile. Like other EPM vendors Host offers integrations to Microsoft Excel, but the company says the business users it talked to when designing MyPlan pointedly did not want a spreadsheet-like grid for collaborative budgeting and forecasting. As I see it it’s a clean design that keeps things simple, but the strength of the MyPlan interface is that it’s a connected and collaborative view of each stakeholder’s budget and plan. Users can click on the wrench symbol to reallocate resources, optimize and otherwise update their plans in order to meet budget expectations. I particularly like the fact that MyPlan eliminates toggling between applications by exposing everything the user needs within a single interface.

Pricing details were not disclosed by Host, but customers will pay for a contributor subscription plus an upcharge for the MyPlan interface that will also include the coming MyPlan Mobile app.

Coming Attractions

Among the recent, soon-to-be released and on-the-horizon upgrades showcased at Host Perform, here are a few highlights:

• Dashboard upgrades added with Host’s May 25 Spring release introduced server-side custom calculations that can be reused across dashboards, speeding development and ensuring consistency.
• Drill-through capabilities expected this summer will enable users to see more details behind the numbers, whether they’re about assets, employees, transactions.
• One-click rolling forecasts now on the roadmap will make it easier to do quarterly and monthly forecasts. You’ll be able to create copies of forecasts and try new scenarios around selected parameters with a single click.
• MyPlan V2 upgrades on the longer-term roadmap will introduce “smart” recommendations for first-pass budgeting and ongoing adjustments to spending based on patterns in historical data.

MyPOV on Host’s path forward:  This is just a sampling of the upgrades Host has in the works. The company also detailed long lists of planned upgrades to its planning, consolidation, modeling and reporting capabilities. Taken together with the MyPlan initiative, there’s clearly healthy investment in supporting both deeper functionality and broader deployments. If there’s one criticism it’s that the move into machine-learning-based predictive and prescriptive capabilities is just getting underway, but it’s early days for these sort of capabilities across the EPM space.

The big trend in EPM is that companies are going cloud and want to take the power of planning into many operational areas. Host was already seeing some of the largest cloud-based EPM deployments, but with MyPlan and MyPlan Mobile, the company is raising the bar. One big customer in the property management space that already had 6,000 Host subscribers added 500 MyPlan users soon after it was released. It’s an early sign that Host is poised to win even bigger and broader deployments.

News: Microsoft Acquires Semantic Machines

Alan Lepofsky

Vice President & Principal Analyst
Constellation Research

Alan Lepofsky - VP and Principal Analyst, Constellation Research. With almost two decades of experience in the collaboration software industry, Lepofsky helps organizations improve the way their employees work together to get their jobs done. Lepofsky’s primary research area The Future of Work, focuses on: integrating collaboration and business processes (Purposeful Collaboration), structuring work via Social Task Management, leveraging analytics and digital assistants to work more productively, the strategic impact of mobile computing on business transformation, and measuring workforce culture based on Digital Proficiency instead of age. Twitter: @alanlepoLinkedIn: https://ca.linkedin.com/in/alanlepo     , Title: Big IdeasIntelligent Collaboration: The Intersection of…...

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News: Microsoft Acquires Semantic Machines

Why is this important?

It’s becoming more common to interact with our devices and applications using natural speech patterns. This could be done by speaking out loud (voice) or typing (chat). However, most of today’s interactions are simple command and response. We ask our phone what the weather is like, dictate a text message, or ask an Amazon Echo to play a song or set a reminder. While these interactions are useful, for similar interactions with business applications to be truly valuable, we need to be able to have multi-step conversations. Imagine asking your CRM system a question and having it first reply with a high-level answer, but then ask you for more details in order to provide you a more detailed response. Imagine your calendaring and scheduling system not just looking for free-time to book a meeting, but also asking if it could forward the attendees the required documents before the meeting begins. These types of actions with “chatbots” or “digital assistants” are going to play a key role in the Future of Work.

This is not Microsoft's first foray into conversational chatbots. In addition to Cortana, Microsoft has many other chatbots / digital assistants, including the very popular Xiaoice (on Weibo) and Zo on Kix.

The acquisition of Semantic Machines is not only for the technology, but also the people that work there. The staff they've acquired include people that worked on products like Apple Siri, Google Assistant, and Dragon Natural Speaking. This helps Microsoft compete against Google (who recently showcased Google Assistant having a bi-directional conversation), Amazon, Facebook, Apple, IBM, Samsung and others working on artificial intelligence and conversational user experiences.

What Does This Mean For Microsoft Customers?

Microsoft has several areas where they could leverage conversational UI, from Windows and Cortana, to Xbox, Office 365, Surface Hubs and more.

News Analysis - Informatica Announces Spring 2018 Release General Availability

Holger Mueller

Vice President and Principal Analyst
Constellation Research

Holger Mueller is VP and Principal Analyst for Constellation Research for the fundamental enablers of the cloud, IaaS, PaaS and next generation Applications, with forays up the tech stack into BigData and Analytics, HR Tech, and sometimes SaaS. Holger provides strategy and counsel to key clients, including Chief Information Officers, Chief Technology Officers, Chief Product Officers, Chief HR Officers, investment analysts, venture capitalists, sell-side firms, and technology buyers.  Coverage Areas: Future of Work Tech Optimization & Innovation  Background: Before joining Constellation Research, Mueller was VP of Products for NorthgateArinso, a KKR company. There, he led the transformation of products to the cloud and laid the foundation for new Business Process as a…...

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This morning Informatica hit the wires with a press release about its major release, Spring 2018, fittingly timed with Informatica World, being held in Las Vegas from May 21st till 23rd in Las Vegas at the Sands Convention Center. 

 

The press release can be found here - so let's dissect it in my customary style:

Redwood City, Calif., May 22, 2018 – Informatica®, the enterprise cloud data management leader, today announced the general availability of the Informatica 2018 Spring release during the 18th annual Informatica World® conference. This release of Informatica's hybrid data management solutions delivers innovative advances across all its core components, leveraging AI powered by the CLAIRE™ engine, to enable employees at every level to unleash the power of data.

MyPOV – Good summary on what is important for customers at the moment, hybrid data and integration capabilities. As all vendors Informatica talks AI with CLAIRE, but will have to show the value of its offering, starting at the conference to convince CxOs.


The Spring 2018 release enables increased productivity by helping organizations manage the challenges and take advantage of the opportunities provided by multi-cloud and hybrid environments, new use cases, user types, data challenges, and compliance requirements.

MyPOV – Summary paragraph, but gets to the other key aspect – (public) cloud and hybrid environment support. New user types are also important, and in the week that GDPR regulation goes live, compliance gets a lot of attention.


The Informatica 2018 Spring release includes:
Big Data for Integration Platform as a Service (iPaaS)
• The industry's first big data management cloud solution for iPaaS increases productivity and agility, accelerates self-service analytics, and empowers data engineers, data analysts, and data scientists to automate and fast-track data management work. MyPOV – BigData is the first of the three drivers to infinite computing (the others are cheap cloud compute and deep neural networks (DLN). And BigData needs data movement and many working projects fail due to the fickle nature of the underlying open source platform as well as the shortage in experienced skills to build, extend and operate BigData solutions. Good to see a packaged offering.


Cloud Application Integration and Intelligent APIs
• New capabilities for Informatica's iPaaS – Informatica Intelligent Cloud Services? (IICS) – simplify multi-cloud and hybrid integration with API management and near real-time application integration.

MyPOV – The traditional DNA off Informatica that is moving to the public cloud, is moving from batch to real time. Real time, via APIs is crucial for many next generation applications that enterprises are building next generation applications for. And cheap compute in the cloud is taking out the human in tedious and repetitive integration work,


Enterprise Data Catalog with Intelligent Metadata APIs and Enhanced AI Algorithms
• New capabilities for Informatica Enterprise Data Catalog simplify democratization of data and provide faster, more relevant data discovery for self-service analytics.
MyPOV – Another offering that is from sometime ago, but still relevant for enterprises. Though in my view it needs a rebranding, the days of the venerable data catalogue are gone in the self-discovering, self-exploring and self-integrating era of microservices. That era needs platforms and Informatica is working hard to become a partner for these.



Intelligent, Automated Enterprise Data Governance Powered by AI
• The integration of Axon™ Data Governance with Informatica Data Quality, Enterprise Data Catalog and Secure@Source® powers a new, comprehensive enterprise data governance solution that fuels strategic business initiatives, drives privacy and protection, and supports regulatory compliance efforts.

MyPOV – Data Governance remains important, especially given the recent data breach news… but governance has to happen on a day to day, and in the era of the cloud, minute by minute basis. Not sure how well Axon can perform here, but it needs to very automated, ideally almost human free in the operational aspects, so it really empowers an enterprise and does not suffocate if with compliance and admin needs.



AI-driven Data Privacy and Protection
• Informatica's comprehensive data privacy and protection solution brings enhanced support for privacy and compliance initiatives across the enterprise.

MyPOV – A very thing paragraph, makes the analyst wonder why…. Will have to learn more at the conference.

[..]

Tweet this: News: @Informatica announces 2018 Spring release general availability @infaworld http://infa.media/pr180522b #INFA18

MyPOV – A new best practice in the era of social media and news amplification – good to see Informatica practicing it.

The Future of Integration Source: Holger Mueller, Constellation Research

News Analysis: Adobe Completes Campaign To Commerce With $1.68B Magento Acquisition

R "Ray" Wang

Principal Analyst and Founder
Constellation Research

R “Ray” Wang is the CEO of Silicon Valley-based Constellation Research Inc. He co-hosts DisrupTV, a weekly enterprise tech and leadership webcast that averages 50,000 views per episode and blogs at www.raywang.org. His ground-breaking best-selling book on digital transformation, Disrupting Digital Business, was published by Harvard Business Review Press in 2015. Ray's new book about Digital Giants and the future of business, titled, Everybody Wants to Rule The World was released in July 2021. Wang is well-quoted and frequently interviewed by media outlets such as the Wall Street Journal, Fox Business, CNBC, Yahoo Finance, Cheddar, and Bloomberg. Short Bio R “Ray” Wang (pronounced WAHNG) is the Founder, Chairman, and Principal Analyst of Silicon Valley-based Constellation Research Inc. He…...

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Commerce Finally Comes To Adobe

On May 21st, 2018, Adobe announced a $1.68 billion acquisition to acquire Magento for commerce capabilities and the developer ecosystem. When the transaction closes, the Campbell, Ca based company will be part of the Adobe Digital Experience team with Magento's CEO Mark Lavelle reporting to Adobe's executive vice president and general manager Brad Rencher.

Traditional bifurcation in the ecommerce landscape has led to vendor proficiency in B2B or B2C commerce. Few organizations have succeeded in delivering on both B2B and B2C. Meanwhile, the death of the CRM and CX market has led to demand for end to end campaign to commerce solutions. SAP's acquisition of Hybris and Salesforce's acquisition of Demandware and Cloud Craze have left Adobe behind competitors who have had a commerce offering. While Adobe has successfully worked with partners to create a friendly environment for commerce integration, customers and design partners have repeatedly asked when Adobe would acquire or build these capabilities. Sources confirm that Adobe has actively sought a commerce partner and acquisition over the past five years as the market for campaign to commerce has heated up. Magento plays a key role in shoring up the commerce offering and B2B chops missing in Adobe increasing dominance in the B2C world.

Constellation believes that the acquisition (should it close) gives Adobe customers:

• End to end creative to commerce support. Adobe customers can reduce the clutter of best of breed solutions and offer a one stop shop for customers. Commerce brings together a defined end point for all the marketing and customer experiences. Magento even brings a light supply chain offering that includes order management, fulfillment, logistics, and shipping.
• B2B credibility in commerce. As organizations from B2C and B2B to P2P commerce, customers seek the ability to find one vendor with both offerings. B2B capabilities in Magento Commerce 2.2 have started to gain traction and Adobe's channel can bring that to customers across the globe.
• Open source ecosystems and platforms. Despite leveraging and contributing to open source initiatives,Adobe's platforms and culture lack an open source DNA. Magento's heritage of customer communities and developer ecosystems will bring fresh air to Adobe customers used to a very planned and prescribed approach. Access to a broader ecosystem of developers and customers that can expand Adobe's reach.
• Mid-market and lower price points. Magento's CMS is simpler to use but supports less use cases than the flagship Adobe AEM product. Channel development and new price points can potentially serve smb customers who have been priced out of Adobe's offerings.
• Industry expertise. Magento built a strong capability in industry verticals such as automotive, fashion, food and beverage, and health and beauty. This expertise can be applied to other areas of Adobe's industry strategy.

Constellation believes that the acquisition (should it close) gives Magento customers:

• Access to a full scale CMS. While the full blown AEM may be overkill for many Magento customers, customers seeking to expand or go up market will have options within the Adobe family. Those customers who seek to move off Acquia now have options.
• Rich analytics. The flagship analytics cloud offering will most likely replace usage of Google and provide a full end-to-end approach in an area Magento under invested in.
• Long term stability. Adobe had improved its ability to acquire vendors from a product offering, customer service and support, employee retention, and customers success point of view. Adobe's profit margins, management stability, and long term revenue provide a long term investment road map for Magento's offerings and should give peace of mind to larger enterprise customers.

The Bottom Line: Adobe's Vision Is Creative To Commerce Reimagined For An AI Driven Digital World

The combination of machine learning, deep learning, natural language processing, and cognitive computing changes the ways that customers and prospects interact with their environments. AI-driven smart services will sense one’s surroundings, know one’s preferences from past behavior, and subtly guide people and machines through their daily lives in ways that will truly feel seamless. This quest to deliver AI-driven smart services across all industries and business processes will usher in the most significant shift in computing and business this decade and beyond. Commerce will be the biggest use case for this type of AI driven mass personalization as organizations accelerate their digital transformation efforts and Adobe is in a great position to deliver this to customers.

Both Adobe's and Magento's customers stand to gain a lot from a one stop shop on this digital journey. As commerce velocity has slowed given the complexity of integration and technologies, customers and partners are asking for a consolidation in the market to de-risk the complexity and improve platform resiliency. Adobe's made extensive commerce and marketing specific Sensei investments that will be available to customers in the Fall of 2018. Adobe promises integration of Sensei into Magento starting 2H 2018

Customers can expect these efforts to bring AI to the end to end process in early 2019. The quest to deliver on creative to commerce for B2B and B2C will require additional acquisitions in subscription billing, CPQ, personalization, and contract management in order to step up the competition with SAP Hybris and Salesforce.com. Customers stand to benefit with this level of investment and consolidation in the market. Adobe will have a lot to learn from Magento on how to improve their ecosystem and open up their platforms. If this occurs, the overall ecosystem will have the innovation required to support innovative vendors at the edge and allow for a complete reimagination of commerce.

Your POV.

Are you excited about commerce offerings from Adobe? Will you still use Shopify, Episerver, ElasticPath, Demandware, Sitecore or Hybris? Let us know what you think? Add your comments to the blog or reach me via email: R (at) ConstellationR (dot) com or R (at) SoftwareInsider (dot) org.

Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact Sales .

Resources And Related Research

Report: How Digital Canvases Enable Hyper-Collaboration

Alan Lepofsky

Vice President & Principal Analyst
Constellation Research

Alan Lepofsky - VP and Principal Analyst, Constellation Research. With almost two decades of experience in the collaboration software industry, Lepofsky helps organizations improve the way their employees work together to get their jobs done. Lepofsky’s primary research area The Future of Work, focuses on: integrating collaboration and business processes (Purposeful Collaboration), structuring work via Social Task Management, leveraging analytics and digital assistants to work more productively, the strategic impact of mobile computing on business transformation, and measuring workforce culture based on Digital Proficiency instead of age. Twitter: @alanlepoLinkedIn: https://ca.linkedin.com/in/alanlepo     , Title: Big IdeasIntelligent Collaboration: The Intersection of…...

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There are several challenges related to information and application overload which impede the speed of work. One of the ways to reduce these challenges is by limiting the scope of the content and conversations that are displayed, to just the items that are contextually relevant to the desired task and topic. In my new report: How Digital Canvases Enable Hyper-Collaboration, we examine how this new user-interface can speed up the way people work.

Kaplan Test Prep Graduates to a Cloud-Based Data Lake

Doug Henschen

Former Vice President and Principal Analyst
Constellation Research

Doug Henschen is former Vice President and Principal Analyst where he focused on data-driven decision making. Henschen’s Data-to-Decisions research examines how organizations employ data analysis to reimagine their business models and gain a deeper understanding of their customers. Henschen's research acknowledges the fact that innovative applications of data analysis requires a multi-disciplinary approach starting with information and orchestration technologies, continuing through business intelligence, data-visualization, and analytics, and moving into NoSQL and big-data analysis, third-party data enrichment, and decision-management technologies. Insight-driven business models are of interest to the entire C-suite, but most particularly chief executive officers, chief digital officers,…...

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Kaplan uses SnapLogic and Amazon Redshift to cut costs, optimize its product portfolio and boost profits.

Kaplan Test Prep is well known for helping students prepare for college-entrance exams, such as the SAT and ACT; post-grad admissions tests, such as the GRE and GMAT; and licensure exams for medical, legal, nursing, financial and other professional careers. Unfortunately, the company wasn’t making the grade when it came to using all available information for data-driven decision-making.

Founded in 1938, Kaplan has decades of historical data, scores of legacy systems and diverse applications. From 2013 to 2015 it made a methodical move to a virtual private network and cloud-based application stack on Amazon Web Services (AWS), an effort that helped Kaplan modernize infrastructure and consolidate from 12 data centers down to four. But from an analytical perspective, Kaplan continued to rely on siloed tools and reporting capabilities. It lacked a centralized store where it could consolidate and analyze data from many data sources.

“We had one, small [Microsoft SQL Server] data warehouse that was ingesting data from just two systems; that’s it,” says Tapan Parekh, director of analytics and data architecture. “It wasn’t a complete view of data, and nobody was happy.”

When he joined Kaplan in November 2015, Parekh immediately began developing an architecture for an analytical data platform. Given that the majority of data sources were now running on AWS, Parekh was considering Amazon Redshift, the vendor’s columnar database service. His biggest challenge was figuring out how to get data into Redshift.

“We have many different applications using different underlying databases and technologies,” says Parekh. “We had different velocities and volumes of data coming in. Ingesting from a relational database is straightforward, but we also have data coming in from streams, which is nonrelational, JSON data, and we have one or two applications that are XML-based. So, a traditional [batch] approach wouldn’t work.”

Anticipated data-velocity requirements ranged from once-per-month loads from accounting systems to daily, interday and microbatch loads from relational and NoSQL sources, to real-time requirements from Amazon Kinesis-based streaming applications.

Kaplan looked at integration options including Informatica,  Microsoft SQL Server Integration Services and hand-coding with Python, but it quickly narrowed its choice to SnapLogic, based on factors including ease of use, cost competitiveness and security features, according to Parekh. But the selection wasn’t finalized until SnapLogic and Redshift passed a proof-of-concept test in which data was loaded from Salesforce and Zuora SaaS services as well as from a homegrown system of record running in Kaplan’s VPC on Amazon. Once the data was loaded into Redshift, the next step was to build a data mart making all these sources of data available for analysis.

“We were able to do it all within three months using all of the data within these systems, not just dummy data,” says Parekh.

In the first year of the production deployment that followed, the focus was on getting data into the Redshift-based platform. The Kaplan team doing this work varied between three and four people. In one project after another, they managed to build SnapLogic pipelines for data ingestion from more than 30 applications into Redshift. Most of these applications are still active, so Kaplan continues to load copies of incremental data changes at latencies ranging from monthly and daily to hourly, near-real-time and streaming speed. Sources range from systems of record, learning management systems and financial systems to Salesforce CRM, Workday, Zuora and Google Analytics. Underlying database management systems include Oracle, PostgreSQL, Microsoft SQL Server, MongoDB and DynamoDB.

In some cases, Kaplan is consolidating data using Redshift, doing one-time migrations from legacy applications that have since been retired or that will soon be retired. In these cases, Kaplan moves all available data onto Redshift, retaining historical information that might fuel seasonality, time-series and other long-term trend analyses.

Kaplan is using Redshift’s Spectrum capability to provide access to variably structured information. Examples include JSON data from Kinesis-based streaming applications and Mixpanel data on mobile app clickstreams. This data is stored in the Amazon S3 object store. Redshift Spectrum SQL commands query data in S3 through external tables, effectively joining this data with the structured data on the core platform. Kaplan is exploring the use of Amazon Athena as the unstructured data querying opportunities expand.

As detailed in my latest case study, “Kaplan Graduates to a Cloud-Based Data Lake on Amazon Web Services,” Kaplan has already seen a greater than 10 X return on its investment, and the benefits keep coming. Not only has the company retired aging software and systems to the tune of more than a $1 million in one-time savings, the new platform is powering activity-based cost analyses that are streamlining operations and boosting profits. What’s more, data-archiving workflows powered by SnapLogic are expected to cut CRM system storage costs by $150,000 annually. To find out more about this case study, follow this link and download the free excerpt.

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Event Report - Microsoft Build 2018 - AI, IoT and bringing it together

Holger Mueller

Vice President and Principal Analyst
Constellation Research

Holger Mueller is VP and Principal Analyst for Constellation Research for the fundamental enablers of the cloud, IaaS, PaaS and next generation Applications, with forays up the tech stack into BigData and Analytics, HR Tech, and sometimes SaaS. Holger provides strategy and counsel to key clients, including Chief Information Officers, Chief Technology Officers, Chief Product Officers, Chief HR Officers, investment analysts, venture capitalists, sell-side firms, and technology buyers.  Coverage Areas: Future of Work Tech Optimization & Innovation  Background: Before joining Constellation Research, Mueller was VP of Products for NorthgateArinso, a KKR company. There, he led the transformation of products to the cloud and laid the foundation for new Business Process as a…...

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We had the opportunity to attend Microsoft's developer conference Build, held from May 7th till 9th 2018 at the Seattle Convention Center in Seattle. Attendance with over 7k attendees, and a large global representation of the press colleagues makes this one of the best attended events from an influencer perspective. 

Prefer to watch – here is my event video … (if the video doesn't' show up – check here):

 

 

Here is the 1 slide condensation (if the slide doesn't show up, check here): 

Event Report - Microsoft Build - AI, Azure, IoT and Windows Push from Holger Mueller

Want to read on? Here you go:

Big push on IoT. IoT got a lot of keynote time across Nadella and Guthrie, Microsoft is pushing big on the IoT edge with its offering Intelligent Edge for IoT, where it can deploy a subset of its capabilities, in similar way like Azure Stack. It might be even that both capabilities share similar product features. For enterprises to be able to deploy the same code – e.g. for analytics, on Azure as well as IoT edge is an interesting product strategy and roadmap. Microsoft also announced support for Cloud Events, the CNCF Event Grid project, it's the only public cloud vendor at the moment to be able to consume and produce events. That matters as it can make Azure the preferred cloud for evend driven computing. Certainly the other IaaS players will not rest, and may well come up with the ability to product / publish events. We will have to see if this big push pays off on the next quarters. 
 

Nadella opens Build 2018

AI getting ready. Microsoft has a long history investing into AI, this Build conference was the culmination of that effort. In general, the vendor has adopted neural networks now, offering a collection of 25+ machine learning services, that can be easily consumed. The race is on to make every developer a data scientist, and Microsoft has tied the competition now – both on an algorithm and ease of adoption level. On the partnership side, Microsoft confirmed the progress on project Brainwave, as well as ONNX. Both are initiatives aimed at interoperability of ML algorithms and the desire to catch up to Google. The most prominent members are AWS, Facebook and Microsoft. Good to see the progress, but adoption vs. the popular Google Tensorflow will be the real test. Interestingly, the Windows ML capability that powers Windows intelligence processes, is as well ONNX based. That's a key step, to potentially open Windows ML / AI capabilities to ONNX build models. Microsoft also announced the availability of its FPGA infrastructure. Announced a few years ago, Microsoft reported in September 2016 (see here), at Ignite, that most of its Azure servers now have a FPGA. Not sure what took 1.5 years, but good for Microsoft to be here today. 
 

Nadella and the two Microsoft platforms: Azure and Microsoft 365

 

Windows with Innovation. The 2018 edition of Build marked the first time that Microsoft did not have a Windows keynote at Build. I have previously voiced my concern on the way how Microsoft split up Windows (see here), the job at Build for the most Windows messaging was with Microsoft veteran Joe Belfiore in the Tuesday keynote (as part of the Modern Worklplace keynote). And Microsoft has done a lot in Windows, especially in the April Update. The underlying magic sauce remains the Microsoft Graph, the ephemeral graph of users, their devices, and their digital assets. It was good to see the Graph in action as part of the developer demo. The new Timeline feature is an interesting innovation and making Windows a human operating system. Humans don't think in file and folder structures, but in time, so being able to get back to a document a user created last week – by the time and not by the folder is a key step to make the working with Windows more human. The same principles apply to the new Sets capabilities, which bring together browser assets as well as Win32 assets – all neatly in tabs next to each other. It's a key step to make Windows more of a workspace – than a collection of apps and files. Both Sets and Timeline are a key innovation with integrative DNA, bringing capabilities together that previously had to be take care of manually, through navigation by the Windows user – a change for the better. Lastly all these capabilities need intelligence, and Microsoft added Windows ML, the ability to run ONNX models. That's a nice compatibility move for the overall Microsoft AI / ML strategy – and gives ML developers an instant, huge install base. Smart move.

 

Belfiore opens the Day #2 Keynote

Azure with Innovation. Azure captured the post Nadella keynote spot, that Scott Guthrie executed in his usual reliable fashion. Kudos to Guthrie with the best keynote punchline at Build ("Let me add value" – when holding a microphone). Apart from more data centers, location and the above-mentioned Event Grid (that runs on Azure Service Fabric) the key attraction for enterprises in Azure remain Cosmos DB. Debuted last year, on the assets of the former DocumentDB, Cosmos DB is what powers the Microsoft Graph (my stipulation, never confirmed by Microsoft to my knowledge) and as such is a super powerful, distributed database, that runs in pretty much all Azure data centers. The synergies of Microsoft opening datacenters for Office, that requires Graph, that requires CosmosDB are at full work. If a CxO decides to build on CosmosDB it's highly likely it will be, in the latest version, in all Azure data centers. Adding the 5 9s to read and write reliability is an amazing SLA for next gen applications. 

 

Guthrie adds value (joke) w Hanselmann

Visual Studio gets more team support. Always good to see Microsoft's continued innovation in Visual Studio, it's Microsoft's premier IDE… and a key reason why developers attend Azure. More team and group support are coming, as well as more comprehensive DevOps support. All good progress coupled with former investments in Xamarin and more. The main concern remains the lack of a packaged PaaS offering from Microsoft, I asked Guthrie if that is coming, and it doesn't seem to be in the plans for the next 12 months. And with that Microsoft misses the opportunity to be the partner of the CIO / CTO who needs to build and deliver a next gen application – from the requirements collection all the way to device management. Microsoft has many of the required pieces, but the need to get stitched together on a project level – something which is additional, and if done incorrectly, risky work. CxOs want that from a vendor, not to be a task for their development teams.
 

Visual Studio Dashboard - can a developer portal look so good?

 

 

MyPOV

Another good Build conference for Microsoft, with almost too many announcements and progress across the board. The biggest impact is likely the AI push, that (finally) has moved to the new gold standard, neural networks (not just in pockets, but across the board). Good to see the FPGA feature getting delivered, but when compared to the hardware innovation of Google, it is slow progress, maybe even too slow delivery here. Between the announcement and delivery of the FPGA capability of Microsoft, Google has been comfortable to announce TPU 3.0 in the same week, an 8x improvement over the TPU 2.0 pods. Microsoft needs to move faster here, as next to data gravity, we are seeing a new gravity emerge, the one of the custom ML hardware, that is faster and cheaper than the competition to create and operate neural networks, powered by deep learning networks (DLN). Microsoft is not alone in the dilemma, its Seattle neighbor AWS has the same challenge here (a likely driver for Project Brainwave in in my POV. The cost of crating and running AI / ML is a key consideration of future next gen App deployments. Finishing the concern section, Microsoft, as the top three cloud vendor with the deepest enterprise roots and access, needs a better PaaS strategy to attract enterprises and their next generation application load. A partnership with CloudFoundry is not enough. An end to end, packaged PaaS suite that takes advantage of all the fast growing capabilities of Azure, AI, ML and more is what enterprises want and expect from Microsoft.

It's too early to say what will happen with the new Windows setup, I learnt positive aspects of the move, but my concerns remain intact at this early point after the announcement, future will tell. What is certainly true is that the elimination of Windows from a nominal platform perspective makes the overall Microsoft platform message simpler. It's now Azure and Microsoft 365 (Windows part of the latter). Compared to e.g. 5 years ago - where it was Windows, Azure and Office.

On the bright side, Azure service fabric, the push on IoT, the edge capabilities, Azure Stack, Cosmos DB are all valid differentiators for Microsoft and CxOs are paying attention to them. And the direction where Windows is heading, also based on a private conversation with Belfiore, towards a more human Windows, that brings together work artefacts in a better way, are all positive takeaways and differentiator. Now let's see what happens in the next months of 2018… stay tuned.

 

 

Tips to ensure a productive analyst briefing

Cindy Zhou

CMO
Level Access

Cindy Zhou is a practicing CMO.  Prviously, she was Vice President and Principal Analyst at Constellation Research covering Digital Marketing Transformation and Sales Effectiveness. With over 18 years of practitioner experience in corporate marketing, product marketing, product management, and sales operations, Zhou has spearheaded marketing transformation at multiple technology companies. She advised Constellation’s clients on strategies to light-up demand generation, prove revenue contribution, and maximize sales productivity. Prior to joining Constellation, Zhou was Global Senior Vice President of Marketing and Sales Operations at BackOffice Associates, a global provider of data quality and information governance solutions to the Fortune 1000 and SAP SolEx partner. Before…...

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• Be respectful of the analyst's time. Our free briefings are 30 minutes, and if I’m able to, I will often extend to 45 mins (at my discretion).
• A little light research to understand who I am and my coverage areas (Marketing (B2B and B2C), Sales, and Customer Experience. I prepare by visiting your company website and learn about you on LinkedIn before the call, please extend that courtesy.
• The best way to utilize the 30 minutes is to have a concise/tight deck to walk me through the following:
  • 1 slide on company background - Where's your headquarters, who your investors are, revenue (or you can share a range), highlight any unique experience of your executive team, and the space/market you play in.
  • 1 slide on who your customers are - “Nascar-style" logo slides are fine, but please highlight 3-4 customers and tell me what you do for them. For example, I often see the same logo for multiple competing marketing companies. Tell me the group using your solution and the context. Also, Who is your target customer and their role?
  • 1-2 slides on your go-to-market strategy.
  • 1 Marchitecture slide to illustrate your product or market slide on your solution and where it fits.
  • Tell me about your pricing model, how do customers buy?
  • Share what's new or coming soon. Whether it’s an upcoming product launch, you sign(ed) a new customer, secured new funding, etc. You would be surprised how many times the news gets buried and forgotten in a briefing.
• Prepare a demo. Especially if I agree to extend to 45 minutes, I want to see your solution in-action.
• Send me your slides the day before the briefing. This way I can save you time by not asking questions answered on a later slide.

• Spend time to educate me on the market. If you looked at my background, you’ll know that I was a practicing marketing executive then an industry analyst. I do understand what the market challenge is for marketers and sellers and have the battle scars to prove it. So telling me the marketing technology landscape is more complicated than ever with 6000+ vendors or that the sales process is broken - is well, wasted time.
• Come unprepared and attempt to do a “discovery” call first in a briefing. Talking through your product architecture with no visual representation only adds confusion. Our time together is limited, preparation is key.
• Ask me or emphasize every 5 minutes, “This is under NDA right?”. As an analyst, I respect our confidentiality and take it very seriously as a matter of integrity. If there is something I’m interested in tweeting about or sharing publicly, I will ask you if the information is public or ok to share. Otherwise, understand our briefing is confidential.
• Say, “we don’t have any competitors” when I ask who your competitors are. I am not asking because I don’t know. I want to know who YOU think your competitors are.
• Follow-up with me asking what kind of “article” I will write after the “interview.” Please understand the differences between industry analysts and the press/media.